Amazon Halts All New Amazon Fresh Just Walk Out Stores

[ClownLoach]

Amazon is sending out emails to visit Woodland Hills, Pasadena, and Irvine on November 11th and 12th for their Grand Reopening events.

[norcalriteaidclerk]

Poway is apparently mothballed too,and I can officially say that I definitely won't see firsthand whether the Citrus Heights Sunrise Village location ever sees the light of day since my workplace is no longer in that center.

[ClownLoach]

Poway is apparently mothballed too,and I can officially say that I definitely won't see firsthand whether the Citrus Heights Sunrise Village location ever sees the light of day since my workplace is no longer in that center.

The Poway story is a little different as they had passed final inspections which means it's a truly mothballed store, but it's completed and signed so they could theoretically open it anytime if they finally figure out the recipe for these stores. Most stores didn't make it as far as Poway, and I'm surprised they opened Murrieta but not Poway as both were fully built out mothballed units. They probably wanted to test the tiny format in the Murrieta store (a closed Rite Aid) which is a colossal mistake of a store and needs to be shuttered immediately, it's too small and cramped and has about half the SKU count of all the other Amazon Fresh stores (which are failing because of limited selection). Murrieta is not much larger than an Aldi, so that puts it as a format larger than the "Amazon Go" stores. I think if Murrieta was a " normal" size Fresh store it too would have never opened.

Corona is also built and has been sitting which has caused a lot of headaches for the tenants in that brand new center who planned their openings a few months ahead of the expected opening that never came. I do not believe Corona is finished inside however, and it never got a sign which makes me suspicious it will never open.

West Covina hasn't changed in months, it's an unfinished shell and abandoned construction site with a large lift truck parked in the doorway. I'm sure the damage from the elements over a year of sitting wide open, and likely looting or theft of materials (wire and plumbing) that would occur in such a situation render that site a complete do-over so again I doubt it will ever open.

I saw another obviously halted Fresh store somewhere in OC but I don't recall the exact location... Might have been near Buena Park? I don't think a store was announced but there was a gray and black box with that telltale green stripe awning above the entrance. I think there's also one sitting and festering somewhere near Ontario.

I think this attempted revamp of the three SoCal stores is probably going to flop. They picked the three stores that didn't open with Just Walk Out tech but did have the original and superior Dash Carts. The new dash cart is an ergonomic disaster and likely shrink creator, and is going to flop even harder than Just Walk Out did.

The real problem is that let's say they get the three non Just Walk Out stores fixed... They still have a ton of additional stores with the seemingly abandoned Just Walk Out which was an incredible investment and not something that could easily be removed. My network engineer who has personally replaced the entire network inside several Walmart Supercenters priced the Just Walk Out job as being millions upon millions, probably $10M per store with easily a thousand miles of wire or more and what is surely a larger computer system in the back room than some entire corporations run off. They have to make more attempts to make that work before absorbing the incredible financial loss of shutting that down. That tells me Amazon must think that the primary dislike of the customer is the selection and the secondary is the Just Walk Out, but I believe that the problem is reversed. The customer would like a better store, but they demand that the checkout be fast and accurate which Just Walk Out is not. I think they're going to like the early results on the 3 store test, and then blow off a ton of money trying to apply the same remodel to the remaining fleet of Just Walk Out stores. That is where they are going to crash and burn, because it doesn't matter what they are selling the customer doesn't want this technology until the day it is truly perfected and error/hassle free. At that point I see them pulling the plug on the entire operation at the end of the fiscal year because otherwise they're not going to be able to carry over the already impaired $750 Million in store closing costs they've already recorded.

And with that, the mothballed stores will never see the light of day.

[mbz321]

Amazon just won't give up on groceries....according to this Bloomberg article, Amazon is going to resume opening Fresh locations. Link

And another about a store in North Jersey where permits have been updated to reconfigure the checkout areas.
Link

[ClownLoach]

Amazon just won't give up on groceries....according to this Bloomberg article, Amazon is going to resume opening Fresh locations. Link

And another about a store in North Jersey where permits have been updated to reconfigure the checkout areas.
Link

They're going to keep saying that until they reach the point where they either have to recapture the funds set aside for the liquidation/closure of the stores or spend them. Until then the best PR move is to keep plowing ahead, as the stagnation they allowed to happen to the brand from the delayed rollout and idle stores has done nothing but hurt them in the eyes of the public. The public cannot understand how this corporation worth hundreds of billions of dollars can't afford to open stores after bullying others out of their leases and leaving neighborhoods with no supermarket; they make themselves look like a failing, broke startup with this behavior. People recognize this, the fact is that nobody likes a loser which is why retail brands that enter a rapid decline collapse so quickly (ahem, Kmart) as the brand becomes irrelevant.

If you think about it, the financial scenario they've created is one where they have an incredible one-time profit balloon they can claim if they can just get these stores to not hemorrhage cash as they obviously were, but tread water or lose money at a much slower pace. They already recorded nearly a billion dollar loss as they set aside that much money to cover the costs of liquidating all of Fresh and paying the lease severance. It's a crap ton of money for frankly not a lot of stores to close since most lease severance is pro-rated and being brand new stores the amount due is nearly 100%. So now if they can barely break even or just lose small amounts of money they can recapture those funds as a nearly billion dollar PROFIT. The truth is the billion wasn't really lost before, and won't really be made now; it's just sliding a invisible pile of cash around from one quarter to another. But it's still a incredible incentive for them to try to make it work even if it seems their go forward strategy is to just let a wholesaler run the center store selection for now since they obviously can't figure it out on their own.

No way they increase their exposure to more losses by opening the mothballed sites that aren't fully built out though, so maybe some of the built out spaces like Poway could be opened (these are the ones that specifically got so far along that the signs are up and the interiors are completely fixtures and installed; they would still have to update them to reflect the changes being tested in the Illinois/selected SoCal stores).

They're also going to have to educate the public again about these stores and that's going to take a lot of advertising. The catastrophic stupidity of the Just Walk Out design is not to be underestimated, for those who are not technologically inclined they walked in and saw mysterious gates that lock them out of the store and then think that they need some sort of subscription or whatever else to shop there like Costco. They created literal barriers to entry when they've already got people like my elderly aunt who think that because they can't figure out computers or shop online that they can't shop this grocery store either. It seems so silly but you see it come to life, that news article about the town with the store they found out is a mothballed Fresh and the guy who starts saying that his elderly relative "can't shop there because he doesn't have an Amazon Prime Card" which is not even reality (and there isn't even a card although you could get a Prime credit card). They see the kiosks to register your credit card to your Amazon account and think that you're going to be hacked by shopping at the store. I'm amazed as to how many older people think it's unsafe to shop online because their credit card number is going to go through the internet where it'll be stolen; I love to educate them that it's arguably more dangerous to swipe it on a gas pump or pin pad that might be tampered with and by the way every cash register in America has been processing credit over the internet for nearly 20 years now. That is going to be an expensive PR campaign that wouldn't be necessary if they hadn't made the appearance of beta testing technological complications (Just Walk Out) as a requirement for shopping instead of just an option. Not to mention the fact that the stores were arguably running exceptionally well when they first launched as delivery only but then they tried scaling back the level of service and quality for the delivery program and lost the majority of that new business which they could have retained even as the economy reopened from COVID if they played their cards right.

I think the most disappointing thing about Amazon retail in general is that it almost seems like their best concept, the bookstore, was the first thing they gave up on. They had a fantastic operation in University Village, Century City and UTC San Diego, but then they came up with the 4 Star variety store concept and basically converted those to it plus opened more. 4 Star was about as ugly, cold and industrial as Fresh. It's like they keep moving further into the wrong direction; the newer and remodeled Whole Foods stores also are more cheapened up in the quality and design of the interiors. They need to can all of the Tesco people they hired to run these operations, from what I could find online they're still firmly entrenched in the retail leadership at Amazon and as long as they're involved it's going to fail just like Fresh & Easy did.

[veteran+]

Spot On!!!!!!

[J-Man]

Just got my "Grand Reopening" mailer for Pasadena. Great coupons: 25% off of $50 for weeks of 11/11, 11/18, and 11/26, and 20% off for 12/2. Not a bad deal, especially when stacked with the 5% rebate for the Amazon Prime VISA.

[storewanderer]

Amazon just won't give up on groceries....according to this Bloomberg article, Amazon is going to resume opening Fresh locations. Link

And another about a store in North Jersey where permits have been updated to reconfigure the checkout areas.
Link

That is great. I hope they will get Roseville and Citrus Heights opened up soon. Their new format is not good but if they are going to open they may as well just get moving and open, no use sitting on empty buildings any longer if they want to be open. What are a few more no volume grocery stores to sit there and let items expire out in?

Also would like for them to find a location in Reno. There is a shopping center in Reno with a vacant Good Guys and Bed Bath and Beyond, actually the Good Guys was supposed to be a Wild Oats relocation but then the Whole Foods merger happened and then the FTC tried to make Whole Foods divest the building but nobody ever expressed interest in it so it has just stayed vacant ever since Good Guys closed.

[storewanderer]

Just got my "Grand Reopening" mailer for Pasadena. Great coupons: 25% off of $50 for weeks of 11/11, 11/18, and 11/26, and 20% off for 12/2. Not a bad deal, especially when stacked with the 5% rebate for the Amazon Prime VISA.

You may want to wait until you see their new prices before you say that... pricing in IL was terrible. So high. Way higher than Jewel which is actually rather reasonably priced. Which means way way higher than lower cost chains.

[ClownLoach]

Just got my "Grand Reopening" mailer for Pasadena. Great coupons: 25% off of $50 for weeks of 11/11, 11/18, and 11/26, and 20% off for 12/2. Not a bad deal, especially when stacked with the 5% rebate for the Amazon Prime VISA.

You may want to wait until you see their new prices before you say that... pricing in IL was terrible. So high. Way higher than Jewel which is actually rather reasonably priced. Which means way way higher than lower cost chains.

The other problem they're going to have a heck of a time with is weaning people off those giant coupons. At this point in time the only customers shopping all have some kind of coupon. It's having the opposite effect on what they want which is consistent traffic. For a short while the coupons said new customers only which probably just moved the customers to the one staffed register increasing their costs and paying cash or with a pay type not linked to an Amazon account.

Failure #1 is all purchasing customers are bringing a coupon.
Failure #2 is that now "regular" purchasing customers won't shop without a coupon.
Failure #3 is that the customers generally limit their spend to the amount of the coupon to maximize their savings, so if it's say a $20 off $50 then they're going to spend as close to $50 as possible and no more. They have adjusted some coupons to % off to compensate but I'm not sure that's working. The $ off are the most desirable and recirculated online.
Failure #4 is that they've obviously marked up the entire store to compensate for the coupon.
Failure #5 is that anyone who isn't somehow in the path of marketing coupons who just walks in to look at the store will walk right back out empty handed because the prices are sky high.
Failure #6 is that I really wonder if the marked up shelf price is intended to cover up the cost of "free" delivery or pickup services... Since the coupon is for bringing in store purchase only out of the stratosphere. If that is the case then they need to figure out the pricing and labor model... Which I suppose is a nut they've been unable to crack which is why they basically have killed their incredible delivery volumes they used to do AND aren't getting any traction on in store sales.

What a disaster.